2. VAT @ 12.5% on 70% of Total amount & Service Tax 12.36% on 30% of Total amount.

You have to check with your CA that if you are paying the taxes to your sub-contractor than will you get it's set-off or not ? because it depands on Tax scheme selected by you.

If steel & cement is in your scope than better idea is to issue a work order only for Labour works & pay them only 12.36% Service Tax. ( Sand , Metal & Bricks will be in sub contractors scope , but you have not to mention in PO, it will be your mutual understanding. Because as you know for sand ,cement & metal nobody is giving you Tax invoice with VAT, so why to pay VAT to sub contracor un necessaryly & create complications.